Why Labour demands a ‘Back to Work’ Budget – Rachel Reeves

THE pain suffered by many businesses and workers due to coronavirus will ease a little this weekend following the relaxing of some lockdown restrictions.

Labour MP Rachel Reeves is calling for a Back To Work Budget as unemployment mounts.
Labour MP Rachel Reeves is calling for a Back To Work Budget as unemployment mounts.

However, there are many people who cannot yet get back to work. This week, I hosted an online meeting with small businesses in my Leeds West constituency to hear first-hand the latest about the impact of the pandemic.

This is a critical time for those companies and workers because Government financial support schemes will soon start tapering to an end.

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Programmes such as the Job Retention Scheme have been a lifeline for many in my constituency, but they fear for the future when the support starts to be wound down in just 28 days’ time.

Labour leader Sir Keir Starmer at Prime Minister's Questions this week.

One fine chocolate-maker in Armley told me they are not in a strong enough position to pay their furloughed workers when they have to contribute to the scheme. They fear they will have to make redundancies – something they had hoped to avoid through the Job Retention Scheme.

Another firm based in West Leeds, which specialises in live events, said it was struggling to access support. The work it had lined has been cancelled. Without urgent help, it fears that it might not be able to continue.

We saw the consequences of the Government’s failure to bring in the lockdown quickly enough and the impact of its failure to ensure an adequate supply of PPE equipment for frontline health and social care workers.

This weekend marks not only an easing of the lockdown, but also a nationwide clap on Sunday to applaud the heroes of the pandemic and mark the 72nd anniversary of the NHS.

Labour is calling for an increased focus on jobs and manufacturing.

While we all pray the peak of the coronavirus health emergency has passed, the worst of the crisis facing our economy is undoubtedly yet to come.

The Government must not be allowed to continue its pattern of dither and delay in deal with coronavirus if we are to avoid a catastrophic impact on our economy which shrank by more than a fifth in April – the biggest monthly fall on record.

Around nine million workers are paid by the Government at present. Financial support schemes have shielded people from the worst effects of a looming recession, and Ministers need to act swiftly to avoid the risk that unemployment rises to levels we have not seen for a generation.

As a Yorkshire MP, Chancellor Rishi Sunak will have been told by local businesses what our region requires to get back on its feet.

The extra investment outlined by the Prime Minister this week is something Labour has called for and is welcome. But what the country and our economy desperately need is a Back to Work Budget to deliver jobs, jobs, jobs and deliver them fast.

Major schemes should be evaluated on their ability to deliver jobs and improve our public services, not on whether they satisfy the PM’s desire for vanity projects.

The timing is critical with a new wave of school-leavers and graduates about to enter the jobs’ market. We know if they cannot find employment or training soon, there is a risk many will become long-term unemployed. We cannot allow that to happen.

The Back to Work Budget must include targeted, flexible help for companies at risk. If the Government allows viable companies to fail for the want of short-term support, it will only add to the costs to taxpayers in higher benefits payments and lower tax receipts from a shrunken economy.

The Government should not deepen the economy catastrophe we will face by withdrawing help from firms, many of which still do not know when and on what terms they can reopen.

The Chancellor should ensure the furlough scheme is continued for sectors that do need more protection. It would be a mistake for him to force all businesses to start making a contribution to the cost of furloughing, regardless of whether they are allowed to reopen or not.

He must look at the differing problems faced by different sectors and come up with solutions that are tailored to the specific needs of each sector.

It is clear industries such as hospitality, travel and live entertainment are among the hardest hit and will take longer to recover.

Our arts and entertainment sector in Leeds, York, Sheffield and beyond, gyms and 
swimming pools – including Bramley Baths in my constituency, holiday destinations such as Scarborough, Whitby and the Dales, engineering firms that supply the automotive and aerospace sectors, as well as the fantastic pubs, cafes and restaurants in our Yorkshire towns, cities and villages will all be fearful for the future.

The Chancellor should bring in the employer contribution to the furlough scheme at a slower rate for firms in sectors that face a longer haul to get back in business.

He should show flexibility and deliver on the words in his March Budget – that the Government would do ‘whatever it takes’ to get us through this.

The Government’s top priority must be to protect as many jobs as possible.

It should get on with a Back to Work Budget and focus on creating and safeguarding jobs in Yorkshire and across the country.

Rachel Reeves is Labour MP for Leeds West and Shadow Cabinet Office Minister.

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